FGF signaling is essential for lung morphogenesis. During years 06-10 of this grant, we have shown that the murine and indeed the human sprouty gene family function as important, highly conserved, inducible negative modulators of FGF signaling in respiratory branching morphogenesis. Recently, we and others have further discovered that tyrosine phosphorylation is critical for Sprouty function. Now our new preliminary data show that the tyrosine phosphatase Shp2, as well as FRS2, which are both required for FGF signaling, reversibly bind mSpry2. Hypothesis: Shp2 protein tyrosine phosphatase plays a critical role in finely modulating mSpry2 function, in a supra-molecular assembly with FRS2, within the FGF signaling complex, which is essential for lung morphogenesis. Aim 1: To determine and compare the spatial and sub-cellular co-distribution of mSpry2 with Shp2, FRS2 and other key FGF signaling elements during lung morphogenesis. Aim 2: To determine the functional role of Shp2 and FRS2 in lung morphogenesis in culture. Aim 3: To determine the relative functional contribution of mSpry2, Shp2 and FRS2 in lung morphogenesis by complementation of FGF10 hypomorphism. Aim 4: To determine the role of tyrosine phosphorylation in protein-protein interaction and supra-molecular assembly of mSPRY2 with SHP2 and FRS2. Aim 5: To determine the functional importance of Shp2 in lung morphogenesis in vivo.